Biases in twin estimates of the return to schooling
نویسنده
چکیده
Recent within-twin estimates of the return to schooling that use instrumental variables to correct for measurement error are considerably higher than existing estimates. This paper extends Griliches’ [Griliches (1979) Sibling models and data in economics: beginnings of a survey, Journal of Political Economy 87, S37–S64]. analysis of sibling or twin estimates of the return to schooling to show that small ability differences among twins can lead to more upward omitted ability bias—and more upward bias overall—in the instrumental variables estimate that corrects for measurement error than in the standard within-twin estimate. This point is relevant for any application in which differencing may not fully remove the omitted variable, and may explain high within-twin instrumental variable estimates of the return to schooling. [JELI21] 1999 Elsevier Science Ltd. All rights reserved.
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